What’s the first thing that crosses a CXO mind, when he or she hears “customer-centricity” bandied about? For many execs, it’s “increased cost.” You betcha. “Gotta have so many mignions attending to so many needy customers that we’ll never post a profit increase.” And if you think about it, makes sense to frame customer-centricity this way.
But it’s wrong. Dead wrong. Wrong because, paradoxically, giving customers more of what they want requires fewer employees, rather than more employees. And managing head count is almost always the pillar of cost control.
Hopefully, now you’re really scratching your head. “How do we get to taking better care of customers by reducing head count?” Actually, by applying a fundamental business principle championed by folks including Jack Welch, Peter Drucker and damn near every organizational consultant on the planet.
Some, including Welch, call this principle “delayering.” At High-Yield Methods, we call it “rationalizing work” (to make sure everything adds value to customers). But whatever the name, it requires reducing “supervisory” layers to a bare minimum. And perhaps the most essential element of delayering is trusting and empowering line employees to make decisions without supervisory oversight (read “interference”).
Now here’s where good organizational strategy meets customer-centricity. Aside from quality products (which includes more than a dollop of service quality), what does research show to be customers’ highest priority? Dealing with empowered employees. Voila.
In a nutshell, delayering the organizational structure, which results in substantial cost reductions, doesn’t just work for companies. It works for customers as well. We rediscover this principle from the opposite direction virtually every time we reengineer business process. When we rationalize process to eliminate activity that doesn’t add value to customers, we very quickly come down to delayering. So in this case, doesn’t matter whether you start from a customer-centrric point of view or the customer perspective. You reach the same end point. Which doesn’t happen very often. Which is also why it’s so unexpected. Which makes it a paradox.
So next time you hear “customer-centricity” and “cost-control” used in the same breath, don’t belch.